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A STEP BY STEP APPROACH TO HOTEL DEVELOPMENT PART I11 How To ASSESS THE MARKET FOR A HorEL By Kirby Payne ow do you assess these market area mand for hotel rooms in an area and on introduction, there is no reason why characteristics in terms of how they a specific site. Further, the article tells these guidelines cannot be applied to a affect the demand — present and future you how to get information on these sub- market demand study for an existing -- for hotel rooms: jects so that you can have a more in- hotel. What better way to lay the ground- population? formed relationship with your consultant. work for re-structuring your entire mar- Income? Note the sample list of consulting firms keting strategy? Employment? in the box. Retail sales? Remember, however, that what is dis- Commercial and industrial activity? cussed here is The Preliminary Market Market Area Evaluation Tourism? Review. The third article in the series will Transportation? discuss The Full Market Demand Study. POPULATION Diversification of the economy? The term "feasibility report,'' as used • How do you evaluate these site charac- here, refers to a market demand analysis Area population trends relating to age, teristics in terms of how they affect the to determine whether there is, in a Inca- profession and income are indicative of demand for hotel rooms: tion, a sufficient demand for hotel facili- potential business — or the lack of it — Location in relation to demand genera- ties to warrant a proposed project. for a proposed hotel's restaurant,bar and tors? This entire series of articles is ad- banquet facilities. Character of the immediate, surround- dressed to the developer of a proposed Growth trends and population shifts ing area? hotel construction. The intention is to vary in their importance to a lodging op- Extent of the competition? help the developer of the project (new eration. Future data projections are often Accessibility and visibility? hotel) cut his risk to an absolute mini- more significant than historic trends. This article provides an overview on mum. If the market for a hotel project is ex- how the above factors influence the de- But as a LODGING editor suggests in his pected to consist of individuals or groups 1Wcome to a - Major_ Publishing Event By Jim Pearson r7-this is the first of 14 articles spbti= What information they need, at every market study findings—might decide to 1 sored by the Construction and step,before proceeding tb the next step. get rid of the hotel.Such cases would be Development CoMmitte'e of the Amen- A broader use of these articles,and the rare, but the reader has a right to laugh can Hotel&Motel Association on these book,will be to show the operator of an in my face unless I mention the possibil- subjects: .. ' existing hotel how to develop sweeping ity. • Analyzing the rtiarltet fer a hotel I marketing information about his location. The series goes far beyond market a given area on a specific site.. I have long contended that nobody needs demand studies.Articles in the series and • Budgethhig and financing hotel con- a•feasibril ty study more than the operator chapters in the book provide top-level struction. - of an existing hotel, 1t'would help him: professional counsel on budgeting • Designing'a property to conform to 1. Understand the market available to projects, securing financing, designing market demands: hint as-of today. facilities for today's market,and adminis- • Selecting an affiliation if one is 2. Re-position his hotel in the market, tering construction projects. desired. if indicated. Never before in my experience have so III The articles are adapted from chapters 3. Conform service changes to meet many professionals(accounting,arrhitec- of a monumental book now in preparation. market demand. tire,marketing, design,finance)pooled on 'A tip-bq Step Approach to Hotel- 4. Conform physical changes to meet their resources to help you reduce risk, Development:The Owner s Glide fa Market demand:.. in hotel investment, to a near vanishing Minirnazitig Risk." : •- - 5. In summary, build a foundation for point. This is a major publishing event. The articles'ue a' 'e` ed 16 dev�t1op ' . 'an tip-to-date thaiketing strategy. (More information on the book:Jim ers of new hotels Purpose is to tell them Of course, the operator—faced with, Groame, (212) 265-4506)